Why MannKind Corp.'s Stock Slumped Today

What: Shares of MannKind Corp. fell by nearly 10% this morning on heavy volume after the company revealed its plan for repaying $100 million worth of Senior notes due in about two weeks from now. This debt obligation has been weighing heavily on MannKind's stock the last few weeks, as the biotech lacks the cash to pay the notes in full.

Per the press release, MannKind will repay roughly $57 million through a stock offering, and another $28 million will be converted into a fresh round of Senior notes due in 2018. The terms of the new notes are broadly similar to the old ones, according to MannKind. The company didn't specify its plans for the remaining $15 million, but presumably this will be paid using cash.

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So what: MannKind dug a deep hole financially developing its inhaled insulin product Afrezza due to several regulatory setbacks that cost the company hundreds of millions of dollars. With the U.S. Food and Drug Administration finally approving Afrezza last year, and MannKind subsequently inking a marketing deal with Sanofi,the burning issue going forward is therefore whether Afrezza's sales can now ramp up quickly enough to cover the company's debt obligations, as well as its ongoing operations.

Now what: If Afrezza's sales don't pick up in a hurry, however, there's a good chance that MannKind will have to resort to yet another round of dilutive financing to keep its doors open for the long haul, or to at least maintain its current level of clinical activities. So, with Sanofi expected to report its second-quarter earnings tomorrow, MannKind's shareholders will undoubtedly be keying in on Afrezza's performance during the quarter.